What You Need To Adjust Now Before Longevity Trends Upend Your Retirement Plans

• Longer life expectancies mean workers need to save more and adjust their investment strategies.
• Planning for a longer retirement involves adjusting lifestyle expectations to ensure financial security.
• As more people work longer, flexible work options and strategic retirement planning become crucial.

Retirement is the dream for most people throughout their career, and that stage of life may now last a lot longer than has been typical. That’s great, right? Right…? 

As life expectancy increases, many workers are finding that their plans for retirement need a major adjustment. The truth of it is that workers may need to adapt to plans for a longer career, and get more intentional now about planning ahead.

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The reality of longer lives must reshape how we save, invest, and think about retirement.

Unfortunately, only 37% of workers believe it’s highly likely they’ll reach their retirement savings target. How can people move strategically through the future of work while also planning for the time when they stop working?

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The Growing Need for More Savings

Life expectancy in both the U.S. has been climbing steadily (life expectancy in the U.S. is forecasted to increase from 79.9 years in 2035 to 80.4 years in 2050) meaning people are spending more years in retirement than ever before. 

This change calls for serious rethinking of how much we need to save for those years. 

The days of relying on a 30-year retirement fund might be over; now, it could be closer to 40 or even 50 years for some individuals.

So, what does this mean for workers today? Simply put: you need to save more. Many financial experts recommend boosting your retirement savings to keep up with longer retirements. 

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The key is to start early and adjust your savings rate over time. Your savings goals should grow along with your anticipated lifespan, not just remain static.

Investment Strategies That Match Longer Timelines

When you’re planning for retirement that could stretch into your 90s or even beyond, you’ve got to start considering not just saving more but investing smarter. Traditional investment strategies that may have worked for people expecting 20-30 years in retirement need a little tweaking for today’s realities.

Experts suggest focusing on a diversified portfolio that balances risk and growth. While more conservative investments (like bonds) are appealing to some retirees, those with longer timelines might benefit from higher-risk investments, like stocks, that can provide better returns over time. 

The idea is to have a combination of safer, stable assets and growth-focused assets that will keep you financially secure for the long haul.

Rethinking Lifestyle Expectations

Of course, saving and investing aren’t the only pieces of the retirement puzzle. How you live during retirement is just as important to consider. 

With a longer retirement, people may need to adjust their lifestyle expectations. This means thinking about how much you’ll spend in retirement and where your money will go. Do you plan on traveling extensively, or would you rather stay closer to home? Would you like to spend your time pursuing hobbies or volunteering?

Effectively planning for a longer retirement means making sure your money lasts which could require adjusting your expectations for your lifestyle. Some people may decide to downsize their homes, reduce expenses, or explore part-time work to keep their savings intact. But no matter what you choose, it’s crucial to make decisions that reflect the reality of a retirement that could last longer than you initially planned.

The Future of Work: Adapting to a Longer Career

As retirements stretch longer, the nature of work is changing, too. The rise of flexible work models, including remote and hybrid options, has already begun to redefine how we approach both our careers and retirement planning. 

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With workers staying in the workforce longer due to better health, career satisfaction, and financial needs, many are choosing to work beyond the traditional retirement age.

As workers stay in their jobs longer, employers may need to offer more flexibility and tailored benefits to support them. This could include offering programs that help employees manage longer careers — such as health programs, retirement savings advice, and options for phased retirement. 

Additionally, workers might increasingly want to engage in freelance or part-time work — both during their prime years to help save additional funds, and as they transition into retirement, creating more opportunities for flexible work arrangements that complement their retirement plans.

Workers will need to adjust their expectations, not only about when to retire but also about how to balance work and life as they age. Embracing a more fluid career path could be key to making the most of both your work life and retirement years.

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